I think you can go by handling the non-fixed price yourself.
The thing is to propose a nice UI to increment/decrement the price (a form with +/-).
You can even propose to copy the average price of the last 5 people who bought this item.
When the price is set, you can handle the form :
- if it's < 1$, just say "Thank you for your offer, but with the paypal transaction cost, I don't get a penny, so I prefer to offer the product to you. Here is the link. If you really want to buy it, you can go back to the previous page."
- if it's > 1$, "Thanks for your purchase, just click this button to pay with Paypal" and you generate the button with the amount
Note that the paypal button appears only at the last stage, you can also propose other payment methods.
If you have several items, you can use a shopping system and set all prices to 0 and customize it to not show the prices anywhere.
Then, on the last page, you ask for the total payment the user want to do and use your customized form instead of the one proposed by the shopping system.